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S7074 (ACTIVE) - Summary

Increases the monetary exclusion on the requirement of plain language in consumer contracts.

S7074 (ACTIVE) - Sponsor Memo

BILL NUMBER: S7074
SPONSOR: KAVANAGH
TITLE OF BILL: An act to amend the general obligations law, in
relation to requirements for the use of plain language in consumer tran-
sactions
PURPOSE OR GENERAL IDEA OF BILL:
Increases the applicability of the plain language law to consumer
contracts involving amounts up to $250,000
SUMMARY OF SPECIFIC PROVISIONS:
Section One amends the closing paragraph of subdivision a of section
5-702 of the general business law to increase the threshold for the use
of "plain language" in consumer contracts.
Section Two is the effective date.

JUSTIFICATION:
New York State first enacted the plain language law in 1977. The statute
requires "plain language" in certain written agreements to which a
consumer is a party, and where the subject money, property or services
are primarily used for personal, family, or household purposes. A dollar
threshold was placed on the definition of "consumer contracts", making
the statute only applicable to transactions valued at less than $50,000.
In 1977, the $50,000 threshold covered essentially all consumer
contracts. Today the $50,000 threshold may riot even cover the cost of
an automobile. This bill proposes to increase the threshold to $250,000.
Since the enactment of this statute, several states have followed New
York's lead and have adopted its own "plain language" statutes.
PRIOR LEGISLATIVE HISTORY:
2015-16 - A.1152 - Passed Assembly / S.3135 - Referred to Judiciary
2013-14: A.7777- Passed Assembly / S.5206- Referred to Judiciary
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:;
One hundred eighty days after becoming law.

S T A T E O F N E W Y O R K
________________________________________________________________________
7074
I N S E N A T E
(PREFILED)
January 3, 2018
___________
Introduced by Sen. KAVANAGH -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary
AN ACT to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The closing paragraph of subdivision a of section 5-702 of
the general obligations law, as amended by chapter 1 of the laws of
1994, is amended to read as follows:
Any creditor, seller or lessor who fails to comply with this subdivi-
sion shall be liable to a consumer who is a party to a written agreement
governed by this subdivision in an amount equal to any actual damages
sustained plus a penalty of fifty dollars. The total class action penal-
ty against any such creditor, seller or lessor shall not exceed ten
thousand dollars in any class action or series of class actions arising
out of the use by a creditor, seller or lessor of an agreement which
fails to comply with this subdivision. No action under this subdivision
may be brought after both parties to the agreement have fully performed
their obligation under such agreement, nor shall any creditor, seller or
lessor who attempts in good faith to comply with this subdivision be
liable for such penalties. This subdivision shall not apply to a good
faith attempt to describe the constant yield or other method of deter-
mining the lease charge and depreciation portions of each base rental
payment under a lease of personal property. It also shall not apply to
agreements involving amounts in excess of TWO HUNDRED fifty thousand
dollars nor prohibit the use of words or phrases or forms of agreement
required by state or federal law, rule or regulation or by a govern-
mental instrumentality.
§ 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law and shall apply to any contract entered into
after such effective date.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.

S7074A (ACTIVE) - Summary

Increases the monetary exclusion on the requirement of plain language in consumer contracts.

S7074A (ACTIVE) - Sponsor Memo

BILL NUMBER: S7074A
SPONSOR: KAVANAGH
TITLE OF BILL:
An act to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
PURPOSE OR GENERAL IDEA OF BILL:
Increases the applicability of the plain language law to consumer
contracts involving amounts up to $100,000
SUMMARY OF SPECIFIC PROVISIONS:
Section One amends the closing paragraph of subdivision a of section
5-702 of the general business law to increase the threshold for the use
of "plain language" in consumer contracts from $50,000 to $100,000.
Section Two is the effective date.

JUSTIFICATION:
New York State first enacted the plain language law in 1977. The statute
requires "plain language" in certain written agreements to which a
consumer is a party, and where the subject money, property or services
are primarily used for personal, family, or household purposes. A dollar
threshold was placed on the definition of "consumer contracts", making
the statute only applicable to transactions valued at less than $50,000.
In 1977, the $50,000 threshold covered essentially all consumer
contracts. Today the $50,000 threshold may riot even cover the cost of
an automobile. This bill proposes to increase the threshold to $100,000.
Since the enactment of this statute, several states have followed New
York's lead and have adopted its own "plain language" statutes.
PRIOR LEGISLATIVE HISTORY:
Previous versions of bill:
2015-16: A1152 - Passed Assembly / S3135 - Referred to Judiciary
2013-14: A7777 - Passed Assembly / 55206- Referred to Judiciary
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
One hundred eighty days after becoming law.

S T A T E O F N E W Y O R K
________________________________________________________________________
7074--A
I N S E N A T E
(PREFILED)
January 3, 2018
___________
Introduced by Sen. KAVANAGH -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general obligations law, in relation to requirements
for the use of plain language in consumer transactions
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The closing paragraph of subdivision a of section 5-702 of
the general obligations law, as amended by chapter 1 of the laws of
1994, is amended to read as follows:
Any creditor, seller or lessor who fails to comply with this subdivi-
sion shall be liable to a consumer who is a party to a written agreement
governed by this subdivision in an amount equal to any actual damages
sustained plus a penalty of fifty dollars. The total class action penal-
ty against any such creditor, seller or lessor shall not exceed ten
thousand dollars in any class action or series of class actions arising
out of the use by a creditor, seller or lessor of an agreement which
fails to comply with this subdivision. No action under this subdivision
may be brought after both parties to the agreement have fully performed
their obligation under such agreement, nor shall any creditor, seller or
lessor who attempts in good faith to comply with this subdivision be
liable for such penalties. This subdivision shall not apply to a good
faith attempt to describe the constant yield or other method of deter-
mining the lease charge and depreciation portions of each base rental
payment under a lease of personal property. It also shall not apply to
agreements involving amounts in excess of [fifty] ONE HUNDRED thousand
dollars nor prohibit the use of words or phrases or forms of agreement
required by state or federal law, rule or regulation or by a govern-
mental instrumentality.
§ 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law and shall apply to any contract entered into
after such effective date.

EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03570-02-8

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